In the context of securities and other types of investments, obtaining the advice of analysts has always been considered a prudent exercise. These analysts possess expertise in evaluating investments, such as securities, mutual funds, bonds, and the like. Most specialize in specific industries or sectors to allow for more in-depth research. During the course of providing investment advice, each analyst may make any number of upward and/or downward forecast revisions on securities in their area of expertise. These forecast revisions, or simply revisions, are changes in opinion on how much a company is likely to earn per share.
When these analysts speak, institutional as well as individual investors listen, driving stock prices sharply up or down depending on the nature of the analysts' latest pronouncements. As can be imagined, some analysts are more influential than others. For instance, some analysts, affectionately named ‘axes’, are so accurate that their comments carry disproportionate weight. While none are infallible, it is important to at least know and consider what professional analysts have to say about a particular stock of interest. With access to this information, users can make their own assessments and invest accordingly. Accordingly, we have determined that a need exists for efficiently disseminating such analyst information to the public. A need also exists for a system, method, and computer readable medium containing instructions utilizable for providing not only information concerning or considering an analyst's revisions, but also information pertaining to the reliability and/or accuracy of the revisions.
Several prior art techniques have not adequately addressed these needs. For example, U.S. Pat. No. 5,132,899 to Fox discloses a stock and cash portfolio development system. As depicted in prior art FIG. 1 of the present invention (FIG. 1 of Fox), the system of Fox uses data gathering and processing methodology to produce a system where a list of stocks and a cash position is generated and purchased for investment and operating accounts. Specifically, the system integrates three areas of data: investment performance for investment managers; Federal Securities and Exchange Commission reports filed quarterly by investment managers; and financial characteristics for a number of stocks, to produce a stock portfolio. For example, in box 1, investment managers are screened to produce a subset for analysis. From there, managers are selected (box 2) and sorted into descending order simply according to rates of return on investments (box 3). Subsequently, a consultant reviews the results (box 4) and prints the top five mangers (box 5).
Similarly, U.S. Pat. No. 4,566,066 to Towers relates to a securities valuation system. As shown in prior art FIG. 2 of the present application (FIG. 1 of Towers), the system of Towers, comprised of components 10-23, produces securities portfolio valuation schedules for multiple simultaneous users. In Towers, a customer communicates with the system through terminal 10 to access and edit accounts in user file 12. By using a CUSIP routine 18 and an AMOUNT routine to reflect stock splits and dividends since the last stock pricing, the system of Towers produces and displays 23 a selected stock portfolio valuation.
In U.S. Pat. No. 5,812,987 to Luskin et al., an investment fund management system manages assets in one or more investment funds over a specified period of time. This system, comprised of components 31-39, determines a strategic investment mix of assets in a particular fund periodically as a function of changing risk. Each fund is managed by manipulating the investment mix of the fund in accordance with criteria related to a diminishing length of time to a horizon where cash will be withdrawn therefrom. In prior art FIG. 3 of the present invention (FIG. 6 of Luskin et al.), the investment mix is adjusted by first obtaining investor portfolio information 35 and market data 36. This data is used to forecast market risks and returns 37, and to determine the portfolio risk 38. Then, the anticipated cash flow stream 39, the discount function 34, and present value of future cash flow 33 are calculated before producing an optimized portfolio 32 of assets.
In U.S. Pat. No. 5,761,442 to Barr et al., a data processing system selects securities and constructs an investment portfolio based on a set of artificial neural networks (prior art FIG. 4 of the present application, FIG. 2 of Barr et al.). The system comprises components 41-70 and is designed to model and track the performance of each security in a given capital market and output a parameter which is related to the expected risk adjusted return for the security. Each artificial neural network is trained using a number of fundamental and price and volume history input parameters 10, 20, 30 about the security and the underlying index. The system combines the expected return/appreciation potential data 50 for each security via an optimization process 60 to construct an investment portfolio which satisfies aggregate statistics. The data processing system receives input from the capital market and periodically evaluates the performance of the investment portfolio, rebalancing whenever necessary to correct performance degradations 70.
However while many of these prior art references disclose adequate methods of managing investment funds and portfolios, none make any mention of evaluating an analyst's or other investment trader's performance. Hence, what is lacking in the prior art is a technique directed not only toward an investment fund, but rather a technique for evaluating analysts and other traders or investment professionals/advisors based on their influence and accuracy. Accordingly, a need exists for a system, method, and computer readable medium containing instructions utilizable for not only disseminating information concerning an analyst's trader's actions, but also for evaluating the analyst's or trader's performance.
In line with the above, a need exists for a system, method, and computer readable medium containing instructions utilizable not only for providing raw information and data but also for evaluating performance based on returns observed after a particular revision, historical consistency, and/or the number of revisions made by the analyst or investing entity.
Furthermore, a need exists for a system, method, and computer readable medium containing instructions utilizable for considering performance based on revisions including a change in opinion including an upward or downward change in opinion of the analyst with regard to at least one investment.
A need also exists for a system, method, and computer readable medium containing instructions utilizable for adjusting a performance measure to accentuate a number of revisions issued by an analyst.
Yet another need exists for a system, method, and computer readable medium containing instructions utilizable for adjusting a performance measure according to a return amount adjustment accentuating the measure according to a return amount realized on an investment.
Still another need exists for a system, method, and computer readable medium containing instructions utilizable for adjusting a performance measure according to a small return penalty penalizing an analyst for small returns.